HIGHLIGHTS: Occupation Army Claims Pinpoint Attacks Targeting So-Called Wanted Militants||White House Again Joins Tel Aviv in Raising Questions About Arafat's Relevance to the Peace Process||PA Security Officials Under Orders to Arrest Islamic Jihad Members|| Israelis Claim Cyanide-bomb Attempt || STORY: The Israeli Navy is shelling Palestinian targets in the Gaza Strip in response to Wednesday's lethal bombing at Megiddo Junction. (Read map caption)

One person was killed in the offshore attack, according to Palestinian sources.

Occupation army sources said the sea-borne assault was "pinpoint" in nature, intended to hit wanted Palestinians, Army Radio reported.

Meanwhile, occupation army units, including infantry and helicopter-backed armor units, are operating in Jenin in the northern West Bank, hunting down suspected Resistance leaders and so-called bomb-making workshops.

The Palestinian bomber who carried out the attack came from Jenin, which borders the Green Line, south of the site of the car-bomb blast, according to Israeli intelligence sources.

The vehicle was smuggled into Israel Wednesday, according to the sources.

A HARSH WHITE HOUSE RESPONSE

In a harsh statement, the White House condemned the attack and said it raised questions anew about Arafat's relevance to the Middle East peace process.

"In the president's eyes, Yasser Arafat has never played a role of someone who can be trusted or effective," presidential press secretary Ari Fleischer said.

PA SECURITY OFFICIALS UNDER ORDERS TO ARREST ISLAMIC JIHAD MEMBERS

For the first time, the Palestinian Authority - while condemning the - said it had no advance knowledge or any ties to the attack. Israel said Arafat was responsible and was presiding over a coalition of terror. Palestinian security officials said they were under orders to arrest Islamic Jihad members.

ISRAELIS CLAIM CYANIDE-BOMB ATTEMPT

Israeli military intelligence officials said Palestinian militants are trying to carry out a so-called mega attack, with large numbers of casualties. Maj. Gen. Aharon Zeevi revealed that in the March 27 Park Hotel bombing that killed 29 Israelis, the assailant tried to use cyanide gas, but the deadly poison was not released because of a technical mishap.

The blast in the coastal town of Netanya triggered Israel's six-week military offensive against Palestinian militants in the West Bank.

MAP CAPTION

An Islamic militant drove a car packed with explosives alongside an Israeli bus Wednesday, June 5, 2002, and then ignited a huge fireball. Sixteen passengers were killed and dozens wounded in the attack on the 35th anniversary of the 1967 Mideast War. (AP Graphic)